Best new cars for under £20,000

The number of great cars for less than £20,000 proves you don't need to break the bank to get a decent motor

Thinking of spending around £20,000 on a new car? You’re in good company. British drivers typically spend an average of £22,000 on a new set of wheels, which means the car makers focus plenty of attention on this part of the market.

There are great cars and some tempting deals for anyone spending £20,000, be it as a cash buyer, taking out a high street loan or arranging a finance deal through the car maker or dealer.

Leading the way is Britain’s best-selling car, the Ford Fiesta. The latest-generation model continues to impress, and at £20,000 drivers could just about slide behind the wheel of the ST version, one of the best small hot hatchbacks ever to burn through a tankful of petrol.

Alternatively, if you prefer something more spacious and comfortable, there is no shortage of SUVs. Fierce competition in this part of the car market is driving up the standards, which is good news for car buyers. Seat, which is part of the Volkswagen Group, deserves a mention here; its Arona is a superbly capable car.

Whatever the type of car you need, make sure you shop around, watch out for special offers, compare deals or finance plans, and you’ll be surprised what you might find. If you're after the most car for your money, you may want to consider a nearly new car, with enormous discounts on the list price even for 2019 models with less than 1,000 miles on the clock.

Best new cars for under £20,000

1. Volkswagen Golf

Our pick Volkswagen Golf 1.5 TSI EVO SE 5drList price £21,615

You’d have to be pretty uncharitable to find fault with the Volkswagen Golf. It’s one of those cars that exceeds expectations at pretty much everything it does, from the way it drives to the level of comfort onboard, fuel economy to running costs.

When fitted with the 1.5-litre petrol engine, in 130hp spec, it drives with excellent manners, pulling eagerly, proving hushed at motorway speeds and returning up to 57mpg, which makes it a viable alternative for anyone wanting a more refined or cheaper alternative to diesel models.

Admittedly, this isn’t one of the more affordable family hatchbacks available. But compare what you get with an Audi A3 or BMW 1 Series, and you’ll find it’s good value for money.

2. Ford Fiesta ST

The Fiesta ST is all about having fun. Few cars, regardless of their price, will have their driver grinning with delight along a nice stretch of road quite like this hyperactive hatchback.

It has a 1.5-litre, 200hp, three-cylinder engine that is brimming with character. It sounds interesting, packs enough of a punch to punt the ST past slower traffic safely and is backed up by an agile chassis that knows how to entertain the driver.

Perhaps the only downside we can think of is that there’s a small fuel tank, so your Sunday morning drive may be rudely interrupted by a trip to the petrol station.

3. Skoda Octavia

When it comes to space, the leader of the race is Skoda’s Octavia. For a budget of around £20,000 or less, few hatchbacks or saloons can compete with this one for stretch-out-in-comfort appeal.

The boot is vast, at 590 litres, and the presentation of the dashboard is clear and uncluttered, while the latest media system enhances the day-to-day user experience.

Our pick of the engine range would be the 1.5-litre, 150hp petrol unit, unless you’re intending to drive more than 20,000 miles a year – in which case you may want to hunt down a nearly-new diesel model for this budget. Sure, some critics might argue that it could be more satisfying to drive – compared with, say, a Ford Focus, it doesn’t feel as responsive – but comfort and refinement are strong, making this an appealing choice for most drivers.

4. Mazda 3

Our pick Mazda 3 2.0 Skyactiv-G SE-LList price £20,595

When browsing the range of hatchbacks for families, it’s tempting to make up a shortlist of the usual suspects, such as the VW Golf (above), Ford Focus or even the more expensive Audi A3 or BMW 1 Series. However, the latest Mazda 3, a car that probably rarely registers on the radar of drivers, is well worth considering.

The new-generation model looks good, boasts a classy interior and the driving experience is one of the most refined in its class. Mazda wanted to make the new 3 both relaxing and rewarding to drive, and in both respect its engineers have succeeded.

The 2.0-litre Skyactiv-G petrol engine isn’t the most muscular, and unlike most modern petrol cars does without a turbocharger - meaning you have to work it hard for rapid acceleration - but aside from this the 3 is an impressive alternative to the norm.

5. Kia Sportage

Our pick Kia Sportage 1.6 GDi 2List price £20,305

We suspect we’re not alone in thinking, “Doesn’t that Kia look good?”. The Sportage could almost pass for a Porsche junior SUV; switch the badges and you could probably get away with telling someone it’s the new Macan.

Happily, though, it doesn’t cost anything like a Porsche. The Sportage range starts at just over £20,000, and if you're happy opting for a nearly-new model, you should have tonnes of choice from 2019 models for £20,000.

There’s a 1.6-litre petrol that performs reasonably well and will manage just over 40mpg, but for the entry-level diesel you’ll have to spend more than £21,500 to benefit from its potential for 57mpg. Again, looking at nearly-new models should give you plenty of appealing options within budget.

6. Seat Arona

Our pick Seat Arona SE Technology 1.0 TSI 115 DSGList price £19,470

For a first-time small SUV effort, the Arona left us seriously impressed. Okay, Seat is owned by the Volkswagen Group, so it’s not as if there isn’t a bit of experience that can lend a hand behind the scenes, but even so, Seat has shot to the top of the class with this compact SUV.

Families will appreciate the space aboard, drivers will appreciate the excellent media system and seamless connectivity with smartphone features, and everyone will be in agreement that the Arona is quiet, comfortable and composed.

Our favourite engine in the range is the petrol 1.0-litre with 115hp, especially as it comes with the DSG automatic gearbox that makes light work of everyday driving.

7. Mini Cooper

Our pick Mini Cooper Sport 3drList price £20,230

Not everyone needs a practical car. Indeed, some drivers are more than willing to sacrifice everyday concerns in favour of owning a car that feels special. And in that respect, the Mini Cooper hits the bullseye.

Forget that it only seats four people, that the back seats are as cramped as those in an old theatre stall, and that the boot is better suited to shopping at a boutique outlet rather than cramming in half the contents of an Ikea superstore. What it delivers above all else is a sense of fun.

The turbocharged three-cylinder engine makes the Mini feel nippy, the roadholding is the next best thing to a go-kart and the driving position and dashboard all reinforce the sense that the Cooper is unlike anything else on four wheels.

8. Renault Zoe

Our pick Renault Zoe Dynamique Nav R110 Z.E 40List price £18,420

It’s tempting to suggest that the Nissan Leaf is the electric car of choice for those on a budget, but in fact it’s too expensive. Even after the plug-in car grant is applied, it costs from more than £26,000. Which leaves the Renault Zoe, the pint-size car for the volt age, which can be bought for less than £19,000.

At that price, drivers will also need to lease the car’s battery, from £59 a month. That gets you a 41kWh battery for up to 180 miles of driving between charges, and it will take approximately seven hours to recharge the battery from flat to full using a 7kW wallcharger – less than two hours if using a more powerful, 43kW rapid charger.

Unlike many more expensive electric cars, this one is very affordable to run, because it falls in value by less over time. It’s also very likeable to drive and live with. Give it a try; you might be in for a pleasant surprise.

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